Business - The Korea Times

Rising digital demand pushes banks to shut down branches

gettyimagesbankBy Lee Min-hyungMajor commercial lenders here are reshaping their sales strategies by speeding up closures of conventional branch offices and shifting to digital banking. Banks consider the move “inevitable” at a time when they have to cut fixed costs and focus more on establishing their own online and mobile ecosystems.Industry officials voiced their consensus that demand for physical office space would keep declining down the road and the office shutdown will continue picking up more steam for the next few years amid the pandemic-induced rise of digital banking.Financial regulators are stepping up pressure on lenders to take careful consideration before closing down their branches amid concerns that those with weak digital literacy skills will fall victim to the banks' move for digitization.According to data from the nation's four major lenders ― KB, Shinhan, Hana and Woori ― the number of their branches have been on a steep decline for the past five years. As of the end of 2015, they operated a total of 3,506 branches nationwide, but that figure has decl

Apr 4, 2021By Lee Min-hyung

Rising digital demand pushes banks to shut down branches

Banks cry foul over new regulation on legal interest rate cut

A loan office of a major bank in Seoul is seen in this file photo. YonhapBy Lee Min-hyungKorean commercial banks are crying foul over the government's recent decision to cut the legal interest rate limit, as they are forced to take on more of a “financial burden” to support those with low credit ratings, industry officials said Wednesday.The backlash came in response to the Financial Services Commission's (FSC) decision Tuesday to cut the upper limit of the maximum interest rate that private moneylenders and any other financial firms can charge per year by 4 percentage points to 20 percent.This is aimed at protecting customers from falling victim to risky loan products with high interest rates.But the government also decided to make not just banks, but insurers and credit finance firms raise 1 trillion won in capital ($883 million) over the next five years to create a fund to launch financial products that customers with low credit ratings can take advantage of.The measure was aimed at minimizing the possible side effects from the former decision, as there stands a chance

Apr 1, 2021By Lee Min-hyung

Banks cry foul over new regulation on legal interest rate cut

Korean banks raise vigilance after Shinhan employee shot in Myanmar

Anti-coup protesters run to avoid military forces during a demonstration in Yangon, Myanmar, on Wednesday. AP-YonhapBy Lee Min-hyungShinhan Bank decided Thursday to temporarily shut down its office in Myanmar's largest city of Yangon after one of its employees was left in a critical condition after being shot by the country's military.The decision is based on the highest of the lender's three-level emergency response manual. All employees there have started working from home following the incident, and the lender is considering ordering Korean employees there to return home under the heightened crisis manual.“We have decided to increase the alert level for the safety of our staff there,” a Shinhan spokesman said. “Shinhan's Korean headquarters will support work for customers in Yangon.”The 33-year-old Burmese official hired by Shinhan's Yangon office was shot on Wednesday afternoon while in a corporate vehicle on her way home from work. The employee is known to be in critical condition.Eleven Korean banks are operating Myanmar branches or offices as of the end

Apr 1, 2021By Lee Min-hyung

Korean banks raise vigilance after Shinhan employee shot in Myanmar

'Bloodbath is imminent': UN envoy warns of Myanmar violence

Citibank Korea rolls out ESG-focused products

A Citibank Korea employee speaks with her client at one of the bank's branches in this file photo. Courtesy of Citibank KoreaBy Park Jae-hyuk Citibank Korea has rolled out a series of products related to environmental, social and corporate governance (ESG) values. The criteria are regarded as an “unstoppable trend” and key investment theme of the year for retail investors, the U.S. banking giant's local subsidiary said Wednesday.The product lineup ranges from overseas ESG funds with main exposure to Europe, where ESG is regarded as one of the traditional investment themes, to domestic equity funds that focus on responsible investment.The bank currently offers five products related to the environment, climate change and responsible investment. Buoyed by increasing interest from customers, the products account for 10.6 percent of the total balance of the bank's mutual funds.“Investing in an ESG fund means making a sustainable and socially responsible investment,” said Gidon J. Kessel, head of Citibank Korea's wealth management product division. “Since the

Mar 31, 2021

Citibank Korea rolls out ESG-focused products

Major banking groups set to offer interim dividends in latter half of 2021

Financial Services Commission Chairman Eun Sung-soo, right, talks with leaders of the nation's top five financial holding firms, at the headquarters of the Federation of Banks in Seoul on Feb. 16. YonhapBy Lee Min-hyungKorea's major banking groups are gearing up to pay interim dividends to shareholders in the latter half of 2021, when the Financial Supervisory Service's temporary regulation capping dividends at 20% will come to an end. The move is seen as part of their preemptive efforts to bolster post-coronavirus stock values.Hana Financial Group has so far been the only financial holding firm here that has carried out an interim dividend policy. But other top-tier financial firms ― namely KB, Shinhan and Woori ― are moving to follow in the footsteps of Hana this year, after they were forced to cut their year-end dividends last year amid pressure from government regulators.Discussion concerning the enhanced shareholder return policy will pick up steam starting in July, when a temporary regulation that places an upper limit of 20 percent for their dividend payout ratio will likely f

Mar 30, 2021By Lee Min-hyung

Major banking groups set to offer interim dividends in latter half of 2021

Financial firms urged to shift focus to governance

This article is the third in a four-part series highlighting the importance of ESG criteria in management and making suggestions for Korea's financial, industrial and public sectors to come up with better ESG strategies for sustainable growth. ― ED.Drastic board reshuffles considered necessary for banking groupsBy Park Jae-hyukDomestic financial holding companies faced harsh criticism for their poor corporate governance structures again during this year's proxy season, because most of their nonexecutive directors successfully retained their seats despite growing calls for diversity in their board members.Experts warned their apparent indifference to governance issues may even make their ongoing efforts for environmental factors less meaningful, causing the undervaluation of bank stocks in line with the global trend to prioritize the environmental, social and corporate governance (ESG) criteria.According to regulatory filings by the nation's top banking groups, several foreign institutional investors have already carried out divestments from them over the past few years, amid lingerin

Mar 29, 2021By Park Jae-hyuk

Financial firms urged to shift focus to governance

KB, Hana, Woori pledge to enhance shareholder returns

From left are KB Financial Group Chairman Yoon Jong-kyoo, Hana Financial Group Kim Jung-tai and Woori Financial Group Chairman Son Tae-seung. Courtesy of each firmBy Lee Min-hyungLeaders of major financial holding firms here have pledged to adopt enhanced shareholder return policies in 2021, a move to appease dividend-hungry shareholders after regulators cut the financial firms' dividend payouts last year amid coronavirus uncertainties.The top priority of their regular shareholders' meetings on Friday was to ensure that they will carry out aggressive shareholder return policies ― such as interim or quarterly dividend offerings ― throughout this year.KB Financial Group, the nation's largest financial holding firm by market capitalization, said it would keep reviewing measures to offer “stable dividends” for its shareholders as early as the second half of this year.“Our basic idea is to set the dividend payout ratio at more than 30 percent,” KB Financial Group Chairman Yoon Jong-kyoo said during its regular shareholders' meeting.KB fixed its 2020 dividend payout

Mar 26, 2021By Lee Min-hyung

KB, Hana, Woori pledge to enhance shareholder returns

Local securities firms increase dividend payouts

From left, NH Securities & Investment CEO Chung Young-chae, KTB Investment & Securities CEO Lee Chang-keun, Eugene Investment & Securities Yoo Chang-soo, and IBK Securities CEO Suh Byung-ki / Courtesy of each companyBy Anna J. ParkMost local securities firms have announced increased dividend payouts for shareholders based on record-high profits from last year's stock market boom. The investor-friendly measures are being unveiled during the annual shareholders' meeting season that lasts until the end of this month.Meritz Securities kicked off this year's shareholders' meeting season last Thursday. The brokerage boosted its cash dividends this year by 64 percent compared to 2020 to 222.7 billion won ($196.4 million). NH Investment & Securities also decided at its shareholders' meeting on Thursday to allocate 210.7 billion won in dividends, which translates into a dividend of 700 won per common share and 750 won per preferred stock. This is a 40 percent increase from last year's dividend per share. The firm's dividend payout ratio has increased to 36.51 percent from 31.7

Mar 25, 2021By Anna J. Park

Local securities firms increase dividend payouts

Orange Life, Shinhan Life Insurance join campaign for cyber etiquette

Orange Life CEO Lee Young-jong, right, poses with Shinhan Life Insurance CEO Seong Dae-gyu, left, and Sunfull Foundation Chairman Min Byung-chul after jointly signing an agreement in Seoul, Tuesday, to participate in the Sunfull Internet Peace Movement campaign. Courtesy of Orange LifeBy Yi Whan-wooOrange Life and Shinhan Life Insurance have joined a campaign led by Sunfull Foundation to root out malicious comments and help improve cyber etiquette on social media, Orange Life said.The Sunfull Internet Peace Movement campaign marks the forthcoming merger of Orange Life and Shinhan Life Insurance. The merged insurer will be renamed Shinhan Life possibly by July.Sunfull Foundation, a private non-profit organization, is chaired by Min Byung-chul, who is also a chair professor at Chung-Ang University.“The campaign is expected to help employees of Shinhan Life keep in mind what it means to work in the life insurance industry and spread their good spirit across the society,” Shinhan Life Insurance CEO Seong Dae-gyu said after signing an agreement on the joint campaign this week.

Mar 25, 2021By Yi Whan-woo

Orange Life, Shinhan Life Insurance join campaign for cyber etiquette

Shinhan approves of quarterly dividends for shareholders

Shinhan Financial Group Chairman Cho Yong-byoung delivers an opening address during the group's 20th regular shareholders' meeting at its headquarters in Seoul, Thursday. Courtesy of Shinhan Financial GroupBy Lee Min-hyungShinhan Financial Group established legal grounds to offer quarterly dividends by changing part of its articles of association during a regular shareholders' meeting, Thursday.This allowed Shinhan shareholders to receive dividends on a quarterly basis from the current year-end dividend policy. Shinhan is the nation's first financial holding firm to have adopted the drive, as part of its enhanced shareholder return policy.The passage of the much-anticipated agenda will enable Shinhan to offer quarterly dividends as early as the second half of this year. It remains to be seen when exactly the group will be able to do so, as regulators here urge financial firms to refrain from providing excessive dividends until the end of the first quarter amid coronavirus-related economic uncertainties.There stands a chance for watchdogs to extend the period to year-end if the virus

Mar 25, 2021By Lee Min-hyung

Banking & Finance